MEDIA RELEASE
VICTORY FOR AUSTRALIAN INVESTORS IN CONCEPT SPORTS DECISION
A judgment today was a win for the rights of shareholders who purchased via prospectus, according to lawyers running the Concept Sports class action.
The Full Federal Court today ruled that subscriber shareholders, who buy shares issued under a prospectus, have the same legal right to sue a corporation for damages as those who buy shares on the market. This overturned a decision made by the Federal Court in September this year.
Maurice Blackburn Principal, Andrew Watson, welcomed the decision.
Maurice Blackburn issued the Concept Sports class action in December 2004 on behalf of 129 shareholders.
Mr Watson said that the judgment was a significant victory for shareholders and confirmed the plain words of the Corporations Act.
The proceeding relate to a Prospectus issued by Concept Sports Limited on 18 May 2004. Mr Watson said the documents allege that the company and its directors breached the Corporations Act by issuing a misleading prospectus. The revenue and profits forecast in the prospectus proved to be substantially inaccurate, only six weeks after its issue.
In the Prospectus, the company made various representations about its current and future profitability. Shareholders allege that at the time of making the representations, the Company did not have reasonable grounds. When the Company announced its results for the 6 months to 30 June 2004, in August 2004, which were significant below the forecasts, the share price plunged for a high of approximately 70 cents to approximately 12 cents.
Shareholders are also suing the directors of the company for the same losses. One of the directors includes the recently appointed president of the Richmond Football Club, Gary March and former president Leon Daphne.
Concept Sports is a Melbourne events and merchandising company, which had the contracts including those to supply merchandise to the 2004 Athens Olympics and the Euro 2004 soccer tournament.
The Australian shareholders Association had supported the application in the Full Federal Court as an important one for shareholder rights. ASA CEO Stuart Wilson welcomed the decision as a win for shareholders and a win for common sense. ASIC also intervened in support of the application for the shareholders.
Media inquiries: Kerry O'Shea at Maurice Blackburn
Phone: (03) 9605 2856 or 0407 874 024
